SAIL may get Chiria mines with strings attached

Steel Authority of India (SAIL) may emerge as the winner in the race to acquire iron ore-rich Chiria mines in Jharkhand but the state is understood to have imposed stringent conditions for the PSU, setting enhanced targets for production.

Last week, the Ministry of Steel and state officials held a meeting and the decision is expected soon after Jharkhand Chief Minister Arjun Munda gives his nod.

Chiria mines has Asia's biggest iron ore deposits of 2 billion tonne and SAIL has been extracting the ore for more than the last 20 years. The iron ore from this mines is the best quality with a high content of iron.

Most of other private players like Tatas and Mittal Steel, who entered into an agreement with the state government recently, have been eyeing this mines.

SAIL has announced an ambitious Rs 37,000 crore expansion plan to become over 20-million-tonne steel producer by 2012 and extension of lease for mining of Chiria would be a real booster for the PSU.

SAIL has already spent about Rs 200 crore over the development of Chiria mines and intends to spend more if the lease was extended for another 20 to 30 years.

Following the meeting, SAIL would now have to intensify its efforts to extract iron ore from the world-famous mines for its plants according to the agreed terms.

The PSU was also spending a considerable sum of money to upgrade its production so as to meet the requirements of the present market needs.